Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Manuel’s home burned down while he and his family were vacationing in Las Vegas. Manuel had insured his home through MDOW with a policy providing $150,000 for the house, $75,000 for personal property, and $45,000 for added costs. Manuel filed a claim for the fire, but MDOW denied it. MDOW told Manuel that it believed he or someone acting on his behalf had intentionally set the fire and that Manuel’s claim form contained fraudulent information. Manuel sued. A jury found that MDOW proved by a preponderance of the evidence that Manuel “either burned his home or caused it to be burned.” The jury did not decide whether Manuel had intentionally misrepresented information during the fire investigation. The Eighth Circuit affirmed, agreeing even under an “implied bias” test of juror impartiality, there was insufficient potential bias alleged to warrant a new trial. The court rejected an argument that the court erred by allowing the testimony of MDOW’s expert witness, who disagreed with parts of the National Fire Protection Association 921 Guide for Fire and Explosion Investigations. View "Manuel v. MDOW Ins. Co." on Justia Law

Priesendorf, distraught and drunk, asked Purscell for a ride to a cemetery. On the return trip, Priesendorf's behavior became erratic. She put her foot on the accelerator, on top of Purscell's foot. Purscell got her to stop. Later, Priesendorf unbuckled her seat belt, scooted over, and repeated the behavior. Purscell was unable to remove his foot. Approaching a stop sign, he put his other foot on the brake, with no effect. Purscell saw the Carrs' vehicle. Priesendorf continued to press the accelerator. Purscell swerved, but the vehicles collided and overturned. The Carrs' vehicle caught fire. Priesendorf was dead at the scene. Later, Purscell learned the gravesite Priesendorf had visited belonged to a person who had been killed in an accident while Priesendorf was driving drunk. Priesendorf had attempted suicide following her friend's death; none of her other friends would give her a ride because of her erratic behavior. Infinity insured Purscell's vehicle with policy limits of $25,000 per person and $50,000 per accident for bodily injury. Infinity immediately put the full amount on reserve, with $25,000 designated to Priesendorf's fatality and $25,000 designated to the Carrs. Infinity immediately received a settlement offer from the Carrs, seeking policy limits. Tim's medical expenses were over $97,000 and ongoing. Amy had separate claimes. Infinity stated that it needed to investigate coverage. Infinity informed Purscell of his right to seek independent counsel. The Carrs withdrew their settlement offer. Infinity eventually filed an interpleader, depositing policy limits in court. A jury awarded Tim Carr $830,000 and Carr $75,000; Priesendorf's wrongful death claim settled for $7,764.50, leaving Purscell with a substantial judgment against him. Purscell sued Infinity, alleging bad faith and breach of fiduciary duty. The district court first and Eighth Circuit rejected the claims. View "Purscell v. Tico Ins. Co." on Justia Law

Kienstra, a Missouri resident, received treatment for uterine fibroid tumors at the Mayo Clinic in 2008. Her health plan concluded that her treatment fell outside the plan's coverage as experimental and requiring prior approval. Internal appeals failed. The plan is a self-funded multiple employer plan, maintained pursuant to collective bargaining agreements, and subject to the Employee Retirement Income Security Act, 29 U.S.C. 1002(1). The plan specified that any civil action for wrongful denial of medical benefits under ERISA must be filed within two years of the final date of denial. Kienstra filed suit almost two and a half years after she learned her claim had been denied. She unsuccessfully argued that the contractual limitations period was invalid because the plan's rules of construction stated that its terms should be read to comply with Missouri law, that a 10-year Missouri statute of limitations governed, and that a separate statute barred contracting parties from shortening that limitations period. The Eighth Circuit affirmed. There is no conflict between the plan's contractual limitations period and Missouri law; state law does not "apply of its own force to a suit based on federal law—especially a suit under ERISA, with its comprehensive preemption provision." View "Munro-Kienstra v. Carpenters' Health & Welfare Trust Fund of St. Louis" on Justia Law

Avon Bank customer Herdering was contacted by "Gibson," who claimed to be the son of an African associate with whom Herdering had done business; that his father had died, leaving a $9 million estate; that the family wanted to transfer the funds to the U.S.; that the money was tied up in the Netherlands; and that the transfer required up-front payments of taxes and fees. Herdering sent Gibson money and approached Avon Assistant Vice President Carlson, who issued Herdering a loan from Avon, but contributed $60,000 of his own money. Avon’s President expressed concern that the estate might be a scam. Herdering later recruited others, telling them that Avon was making the loans and having both men write checks to Avon. Froseth contributed $405,000; Imdieke contributed $80,000. Carlson wired the money in violation of Avon policy that prohibited wiring money to non-customers. When the scheme fell apart, Avon terminated Carlson and sent the investors letters stating that it viewed their investments as related to Carlson’s personal dealing and not involving the bank. They sued Avon for fraudulent misrepresentation. BancInsure agreed to provide coverage under the Directors’ and Officers’ Liability Policy, rather than simply defend Avon, reserving its rights. A jury found that, in the scope of his employment, Carlson had breached his duty to disclose material information. BancInsure asserted that neither the Policy nor a separate Fidelity Bond covered the loss. The Eighth Circuit affirmed the district court holding that the Bond, but not the Policy, covered the loss, and an award of prejudgment interest. View "Avon State Bank v. BancInsure, Inc." on Justia Law

After plaintiff was severely injured from falling off a ladder, he brought claims in state court against the ladder's manufacturers (Versa) and the seller of the ladder (Menard). Gulf, Versa's former insurance company, subsequently moved to intervene in the products liability action. Plaintiff and Versa then entered into an agreement in which Versa admitted liability and permitted plaintiff to seek recovery from Gulf. After trial, the jury returned a verdict for Gulf and plaintiff moved for a new trial, or in the alternative, reconsideration of his motion for summary judgment. The court concluded that the district court did not abuse its discretion in rejecting plaintiff's requested spoliation instruction where defendant's destruction of claim files and records was insufficient to show that the files had been destroyed in anticipation of litigation; given that the district court did not abuse its discretion in declining to grant a spoliation instruction, and did not abuse its discretion in admitting evidence of plaintiff's lawyer's disciplinary history, a new trial is not required to prevent a miscarriage of justice; and the court did not review the district court's denial of the motion for summary judgment after the trial on the merits, because plaintiff had a full and fair opportunity to litigate the issue of whether Versa received the March 2003 letter at issue. Accordingly, the court affirmed the judgment. View "Burris v. Gulf Underwriters Ins. Co." on Justia Law

Daniel attended a birthday party for a St. Louis County police officer at Gannon's tavern, as an invited guest. Following a confrontation between Lammert and another in the parking lot, Lammert hit Daniel, then drove his vehicle out to the street, running over Daniel's body. Daniel died from complications due to the injuries. Lammert turned himself into the police and pleaded guilty to manslaughter and leaving-the-scene charges, claiming that he thought Daniel was out of the way. In state court premises liability and dram shop claims against Gannon's, its liquor liability insurer defended the dram shop claims, but the general commercial liability insurer, Atain, refused to defend and declined to participate in mediation. Gannon's settled, assigned its claims against Atain, and agreed to a $2 million consent judgment on the premises liability action. The estate sued Atain, alleging equitable garnishment and vexatious failure to defend and indemnify. Atain cited an exclusion precluding coverage for injuries caused by automobiles and an assault and battery exclusion. The Eighth Circuit affirmed summary judgment in favor of the estate on the equitable garnishment claim, finding that the exclusions did not apply, but granted Atain summary judgment the vexatious-refusal-to-defend claim, finding that the exclusions arguably could have applied and coverage was a close call. View "Minden v. Atain Specialty Ins. Co." on Justia Law

Zup’s owned a strip mall in Babbitt, Minnesota, where it operated a supermarket and rented space to other businesses. When the strip mall burned down in 2011, Zup’s lost income from its supermarket as well as rent from its tenants. Zup’s had two relevant insurance policies, one from Security National and one from West Bend. Zup’s sought payment from Security for the lost supermarket income and payment from West Bend for the lost rent. Security learned of the West Bend policy and concluded that West Bend also had insured and was primarily liable for the lost supermarket income. The district court determined that West Bend was not liable for lost supermarket income. The Eighth Circuit affirmed. The West Bend policy did not mention supermarkets or charge supermarket-specific premiums. The phrase “lessor’s risk only” appeared on the declarations page. Because West Bend’s policy was secondary to Security’s, West Bend need pay only if Security National’s coverage was exhausted. View "Zup's of Babbitt-Aurora, Inc. v. West Bend Mut. Ins. Co." on Justia Law

Weitz contracted with Hyatt to build an Aventura, Florida assisted-living facility, which was completed in 2003. Hyatt obtained post-construction insurance from defendants. Weitz was neither a party nor a third-party-beneficiary. The policies exclude faulty workmanship and mold, except to the extent that covered loss results from the faulty workmanship, such as business interruption losses. The construction was defective. Hyatt notified defendants of a $11 million loss involving moisture and mold at the care center, settled that claim for $750,000, and released defendants from claims relating to the care center. Hyatt next discovered moisture, mold, and cracked stucco at the residential towers. Hyatt gave defendants notice, but bypassed inevitable defenses based upon policy exclusions, and sued Weitz. Weitz sued its subcontractors and its own construction contract liability insurers. Weitz settled with Hyatt for $53 million and was indemnified by its insurers for $55,799,684.69. Weitz sued, claiming coverage under defendants’ policies, based on equitable subrogation or unjust enrichment. The Eighth Circuit affirmed dismissal, recognizing that Weitz, as subrogee, was subject to any defense Hyatt would have faced, and that Hyatt had discharged defendants from liability; that suit was barred by the contractual period of limitations; that Weitz was barred from suing for damage to the plaza because Hyatt did not give defendants notice of that damage; and that Weitz had already collected several million more than it paid. View "Weitz Co. v. Lexington Ins. Co." on Justia Law

In a 2008 collision on I-40 in West Memphis, McHone, driving a car, was struck by a tractor trailer driven by Whirley. McHone’s State Farm policy included coverage for uninsured motor vehicles with bodily injury limits of $100,000 per person. The trucking company defendants were insured by Gramercy. McHone’s medical bills exceeded $400,000; her physicians estimate future medical care will exceed an additional $400,000. Before trial, Gramercy was placed into Rehabilitation with an automatic stay. In 2013, McHone’s counsel notified State Farm of the problems with Gramercy and demanded $100,000 uninsured motorist benefits. State Farm asserted that no coverage existed. McHone settled her claims against Whirley and the truck’s owner for $300,000 to avoid the claim process with the State Guarantee Fund. Gramercy was liquidated. State Farm again refused to pay uninsured motorist benefits. The district court ruled in favor of State Farm as being entitled to a credit for the settlement proceeds regardless of the date of insolvency. The Eighth Circuit affirmed. State Farm is entitled to a credit for the money McHone received from her settlement. McHone’s argument that the credit is not applicable because the payment was made by the receivership rather than by Gramercy itself is not supported by the policy language nor Tennessee law. View "McHone v. State Farm Mut. Ins. Co." on Justia Law

Jackson claimed to be at work when her house burned. Little Rock Fire Department investigator Baker determined the fire was started by human intervention. Baker detected accelerants in the house; the fire's points of origin were inconsistent with accidental causes. Baker initially believed that Jackson might have been the victim of a hate crime, because he discovered racially derogative graffiti in her garage, but there were no signs of forced entry and the house was largely empty of personal items, food, or furniture. Baker claims that Jackson stated that she was the only person with access to the house and that she was not missing any property. Baker obtained a search warrant for her cell phone records, which indicated that Henson, Jackson's coworker, attempted to call Jackson three times during the period at issue. Henson denied calling Jackson. Baker concluded that Henson may have burned Jackson's home at her request. No criminal charges were filed. Allstate's investigative unit concluded that Henson had burned Jackson's home, noting that Jackson was subject to a divorce decree that ordered her to sell her house and that she tried to sell for several years,. Allstate denied Jackson's insurance claim based on Intentional Acts and Material Misrepresentations Exclusions. A jury found in favor of Allstate. The Eighth Circuit affirmed, rejecting procedural challenges and a challenge to the sufficiency of the evidence. View "Jackson v. Allstate Ins. Co." on Justia Law